DUBLIN (Reuters) - Paddy Power Betfair's <PPB.I> <PPB.L> first quarter earnings fell 6 percent due to new betting taxes, levies and start-up losses in the U.S., the company forecasting something between a slight decline and 5 percent increase for the year as a whole.
The bookmaker said that excluding the one-off annualisation of taxes and start-up costs, core earnings would have been flat in the first three months as it guided for a full year outturn of 470 million pounds to 495 million pounds.
That compares to 18 percent growth last year, when earnings came in ahead of expectations at 473 million pounds ($643.9 million).
Revenue was also flat as it said customer activity in its main market of Britain and Ireland was adversely affected by a sustained period of bookmaker friendly sports results and a high level of racing fixture cancellations.
The gambling group, a product of the 2016 tie-up between online betting exchange Betfair and Paddy Power, which runs betting shops as well as an online business, had said in March that it would increase its marketing spend by 20 million pounds this year, leading to earnings downgrades.
It said on Wednesday that it would increase investment in promotional and marketing activity in its Sportsbet business in Australia to take advantage of the potential disruption to competitors amid market consolidation there.
It also plans to return 500 million pounds to shareholders over the next 12 to 18 months in a share buyback programme to be initiated shortly.
"We have made good progress against our strategic priorities," Paddy Power Betfair Chief Executive Peter Jackson, who took over in January, said in a statement.
"In Europe, the successful completion of our platform integration has resulted in a meaningful improvement to the Paddy Power product. In Australia, Sportsbet continues to perform well and is targeting further market share growth."
(Reporting by Padraic Halpin; Editing by Keith Weir)
